Charity Promises Sweeping Changes After Review

By REED ABELSON

Published: April 12, 2000

Acknowledging for the first time that its organization lacked proper oversight, the charity Operation Smile notified its chapters last week that it was enacting sweeping changes at the suggestion of an outside lawyer retained by the organization to review its conduct. The changes are aimed at addressing criticism that arose last year over the charity's management and the quality of its medical care.

The charity, which helps thousands of underprivileged children overseas obtain plastic surgery, said it would step up efforts to hire a new chief executive and would add the position of chief medical officer. The charity also intends to strengthen board supervision of its volunteer medical staff.

Two articles in The New York Times last year reported on deaths and health complications among some of the children under the care of the charity.

In a letter circulated among the charity's staff members and volunteers in recent weeks, David N. Ventker, an Operation Smile director, also disclosed that the review of the organization's conduct uncovered ''isolated instances of inadequately documented expenditures and other record-keeping issues.'' Without providing further details, he said that ''all such expenses have been reimbursed.''

Though the charity promised last November to make public the full findings of the review by the outside lawyer, a spokeswoman said Operation Smile now considered it an internal review. F. Bradford Stillman, a lawyer from Norfolk, Va., who performed the review, did not respond yesterday to a phone call seeking comment.

Some members who left the board last year in frustration expressed disappointment that the charity was not being more open about the findings of its investigation and more direct in addressing specific concerns. ''They did themselves a disservice,'' said one of those who resigned, Stephen H. O'Connor, president of New Brunswick Tomorrow, a New Jersey civic group. ''It raises more questions than it answers.''

Founded by Dr. William P. Magee Jr., a plastic surgeon, and his wife, Kathleen, in 1982, Operation Smile sends volunteer doctors and nurses to poor countries to perform surgery on children with facial deformities like cleft lips and palates. The charity had long enjoyed the unstinting support of major corporations like Johnson & Johnson and Warner-Lambert and many celebrities. But last year the charity came under increasing criticism from volunteers, members of its board and foreign doctors, who said the charity was practicing assembly-line medicine by putting volume ahead of patient safety.

Amid much of the uproar, the charity's chief executive resigned under pressure, several directors left the board, and some key donors like Warner-Lambert withdrew their support.

Though Dr. Magee has adamantly defended the quality of the charity's surgeries, he declined to comment yesterday. Mr. Ventker, the director who signed the letter, did not return phone calls.

Mr. Ventker's letter, dated March 30 and written after the board had a chance to digest Mr. Stillman's report, stated quite plainly that the charity's board thought that ''there is room for improvement.''

''There is no evidence of cover-up or destruction of records,'' he wrote. ''Indeed, the board was aware of the deaths in the field, including China, Kenya and Vietnam, which were documented by the media, but it is also clear that the board lacked an appreciation for medical issues and complications which occurred in these and other cases, and that it has not provided the oversight required.''

''As a result,'' Mr. Ventker's letter continued, ''the board has determined that we need to place greater emphasis on issues related to quality assurance and the standard of medicine to be practiced in the field.''

The letter was first made public by The Virginian-Pilot newspaper in Norfolk.

One thing that does not appear to be changing is Dr. Magee's role as chairman of the charity, according to Lisa Jardanhazy, a spokeswoman for Operation Smile.

William C. Wren, a regional airports commission executive in Minneapolis who serves on the Operation Smile board, said, ''The board of directors is committed to professional management, and the board does include Dr. Magee.''

Officials of the charity reached yesterday would not disclose any additional information on the financial irregularities that were uncovered in the review other than to confirm that Mr. Stillman had retained PricewaterhouseCoopers to help review records and look into concerns over financial mismanagement.

No action has been taken against any individuals, according to Ms. Jardanhazy. And though Mr. Ventker's letter said that ''fiscal policies and procedures will be tightened and improved, and will be closely monitored by the board of directors,'' Ms. Jardanhazy could not elaborate on any specific steps to be taken by Operation Smile.

As it replaces directors who have resigned, Operation Smile will include more representatives from the charity's chapters, the letter added.

Photo: Dr. William P. Magee Jr., a founder of the charity Operation Smile. (Justin Lane for The New York Times)